Bank of Israel Confident Despite US Finance Woes

Senior officials of the Ministry of Finance, the Bank of Israel, and the Securities Authority held what they called "an update meeting" Saturday evening, to discuss the recent financial woes in the United States.

The officials conferred regarding the volatility of the financial markets in Israel and around the world, and the implications of the downgrading of the US long-term sovereign credit rating. The point was made that the possibility of such a downgrading of the US rating had been taken into account for some time in Israel's macroeconomic policy, and recently had also been priced in by the markets to some extent.

Against this background the Ministry of Finance, the Bank of Israel and the Securities Authority had held several meetings in the last few months.

It was noted that the implications of events in the global markets are not clear at this stage, but the Bank of Israel and the Ministry of Finance monitor developments constantly, and are ready to use the tools available to them as necessary.

The officials said that Israel's macroeconomic situation is good, and so far the debt crises abroad have had a limited impact on Israel, due to its macroeconomic strength, achieved by means of adherence to fiscal discipline, among other things, in the last few years.

Participants in the meeting included the Minister of Finance, Dr. Yuval Steinitz; the Deputy Minister of Finance, Rabbi Yitzchak Cohen; the Deputy Governor of the Bank of Israel, Dr. Karnit Plog; Professor Shmuel Hauser, Chairman of the Securities Authority; and other senior Ministry of Finance and Bank of Israel officials.